NFL Season Expected to Drive Record-Breaking Betting
The start of the NFL season is anticipated to bring about record-breaking betting, with projections from the American Gaming Association estimating that U.S. adults will wager $35 billion this season. This marks a significant increase of over 30% compared to last year’s season, which saw Americans betting $26.7 billion on the National Football League. The growth in sports betting can be attributed to the legalization of sports betting in several states, including Maine, North Carolina, and Vermont, as well as the relaunch of sports betting in Florida by Hard Rock International.
Despite the surge in sports betting, the stocks of gambling companies have not seen the same level of growth. Shares of DraftKings, Penn, Caesars, MGM Resorts, and Entain, which collectively own BetMGM, have all experienced negative performance year to date. However, Flutter, the owner of FanDuel, has seen a 19% increase in its stock value after listing on the New York Stock Exchange. This can be attributed to its strong second-quarter earnings that surpassed revenue and profit expectations.
Competition among licensed sportsbooks is intensifying as they strive to attract new customers and increase brand loyalty. The NFL kickoff presents an opportunity for sportsbooks to launch new technologies and innovative wagers that entice players. FanDuel, for example, has partnered with YouTube to offer a “Sunday Ticket” promotion, allowing players who wager $5 to access a three-week trial to watch out-of-market NFL games. By providing fans with the opportunity to watch their favorite teams, FanDuel hopes to increase wagering activity.
Moreover, sportsbooks are focusing on enhancing their app designs and introducing more betting options, such as micro-betting, which allows wagers to be made on specific plays as the game unfolds. This is particularly important as over 95% of sports wagers now occur online. Fanatics, a newcomer to the sports betting industry, has made significant strides by leveraging its existing database of 100 million sports fans for customer acquisition. The company rewards its customers with products from its merchandise and collectibles businesses, creating a unique and rewarding experience.
In preparation for the 2024 football season, Fanatics hosted Fanatics Fest NYC, a fan activation event where customers had the opportunity to meet athletes and celebrities. The response from customers was overwhelmingly positive, highlighting the appeal of Fanatics’ proposition as the most rewarding sportsbook. CEO Matt King described this period as the “sports equinox,” when multiple sports are being played simultaneously. The company aims to build unique player rewards that align with this busy sports calendar.
DraftKings, another prominent sportsbook, has identified the NFL as its most popular league in terms of both wagering volume and the number of bets accepted. To cater to its customers, DraftKings has introduced a “No Touchdown” prop bet, allowing bettors to wager on whether a top player will not score a touchdown. These new offerings aim to enhance user engagement and attract more bettors.
Penn Entertainment, which launched ESPN Bet in partnership with the Disney-owned sports giant, is optimistic about its media integration with ESPN. Since its launch last year, ESPN Bet has grown its customer database by 80%, reaching 31 million members. Penn Entertainment aims to improve customer loyalty and retention through enhanced product offerings, capitalizing on the significant engagement activity within its app.
BetMGM has introduced the first single wallet for mobile play in Nevada, allowing customers to easily transfer their accounts between Las Vegas and their home states. This innovation eliminates the friction associated with multiple transactions, providing a seamless betting experience for users.
Overall, while the NFL season is expected to drive record-breaking betting, the performance of gambling company stocks has not reflected this growth. However, sportsbooks are implementing various strategies to claim a larger share of the market by offering unique promotions, improving app designs, and introducing new betting options. The focus is on providing a rewarding and engaging experience for customers to increase loyalty and attract new players.
